RCM Challenges in Healthcare Reform hfma Georgia Chapter November 10, 2011

Presentation Outline Contracting and Payment Approaches Payment Methodologies Integrating Clinical and Financial Aspects of the ACO New Revenue Cycle Requirements Basic Revenue Cycle Challenges and Solutions Advanced Revenue Cycle Challenges and Solutions A Practical Health System Discussion Guide

The Three Tiers of Payment Approaches Tier 1: Fee-For-Service and the World we have lived in for the past 20 years Approach Tier 2: The Near Term changes of Procedure and Episode of Care Bundling, and Combined P4P with Physicians and Hospitals Approach Tier 3: Managing an Accountable Care Organization Approach

Tier 1: Fee-For-Service Hospitals Separate and Physicians Separate CMS maintains Part A and Part B APCs, DRGs, Fee Schedules, UBs and HCFAs Payers/Providers negotiate the methodologies %Charges, DRG Case Rates, Procedures, Per Diems, Fee Schedules, % Medicare, etc. Administrative and Clinical Utilization Review Denials, Underpays, Disputes, etc.

Tier 2: Bundling and Value-Based Contracting Physicians and Hospitals Combined Services All-Inclusive Procedures and Services Procedure Specific or Episode of Care Single Site (Acute Care) or Multiple Site (IP,OP, Office, Rehab, Home Care) Performance Payments Severity Adjusted EBM Guidelines Across Continuum Contracting and Claims Adjudication

Tier 3: Health Systems as Accountable Care Organizations Integrated Physician/Hospital Organization Responsible for Identified Populations Direct Contracting with Buyers Accept Risk for Defined Patient Services Have an Information Platform to Measure Clinical Performance and Perform Financial Transactions Act like a Payer?

A Combined Solution for All Three Tiers A Common Platform for All Manage Scenarios Simultaneously 80% Tier 1, 15% Tier 2, 5% Tier 3 Combined Performance Reporting CMS and Payer Tier Profiles MC & PFS Desktop Simplification Physician/Hospital Care Coordination Enrollment and Payment Functionality

New & Expanded Payment Models Patient-Centered Medical Home Payment Primary Care Driven Front End of Acute Services Bundled Procedure Payment High Cost Services – CABG, Joints, Backs, etc. Bundled Episodes of Care Payment Tied to Patient Condition and Time Related Performance Based Payment EBM Based, Severity Adjusted, Outcome Based Partial and Total Capitation Payment Population and Condition Driven

ACO Integration Roadmap Clinical Service Line Alignment Clinical Pathway Development Benchmarking Complex Procedures Benchmarking Episodes of Care Modeling Episodes and Procedures Creating Bundled/Performance Contracts Adjudicating Bundled Claims Reporting/Managing Utilization

Expanded RCM Requirements Utilization Reporting Across Continuum Health System and Payer Driven IP, OP, Physician, Ancillary Providers Data Aggregation in Multiple Delivery Sites Clinical Data from Physicians, Rehab, and Home Care Financial Data Across the Continuum Revenue Cycle Calculations & Transactions Contracting, Claims Management, Adjudication Patient/Payer Membership Management

Basic Revenue Cycle Challenges Create and Model Bundled Contracts Develop and Manage Combined Charge Masters and Fee Schedules Aggregate Bundled Claims and Payments Calculate Performance Payments Provide Timely, Accurate and Transparent Clinical and Financial Reporting

ACO-Like Revenue Cycle Challenges Patient Enrollment and Eligibility Contract Modeling across Continuum Maintenance of Multiple CDM/Fee Schedules Case Management/Referral Services Claim Re-Pricing/Clearing/Payment Dispute Resolution/Collections Risk Sharing, Gain Sharing, Treasury Services

The Basic Solution Bundled Payment Capabilities Contract Modeling and Management Integration of Fee Schedules and CD Patient Eligibility for Bundled Programs Performance-based Payment Capabilities Clinical/Severity-based Calculations Financial/Spend-based Calculations Integrated Reporting Capabilities Robust Utilization and Financial Reports

The ACO-Like Solution Claims Management, Clearing, Posting Enrollment and Provider Rostering Case/Referral/Utilization Management Dispute and Collections Management Provider Credentialing ACO Patient Self-Service Portal Treasury Services Multi-Level Reporting – Financial/Clinical

An Organizational Discussion Board Of Directors Senior Leadership Team (C-Suite) Clinical and Financial Department Managers The Revenue Cycle Team Leaders All Revenue Cycle Personnel

Who is in Our Integrated ACO? Answer All of our Facilities All Active Medical Staff Contracted Ancillary Physicians and Extenders Facilities (Rehab, ASC, etc) Home Care, Hospice RCM Solution Provider Demographics TINS and Sites Facility Identifiers CMS Information RCM IT Information Clearinghouse Info

Which Service Lines are in the ACO? Answer Cardiovascular Orthopedic/Joints Spine Surgery Stage 2 Cancer RCM Solution Physician Roster Sites of Service Services Benchmarks Model Claims Contract Terms Fee Schedules, Codes

Who are the Covered Enrollees? Answer The Hospital Employees Aetna Fully Insured United ASO Employers Tri-Care RCM Solution Contract Terms Payment Method Enrollment Database Patient Demographics Patient Benefits

What Payment Models Included? Answer PCMH – Primary Care Episode of Care Medicare SS Blue Cross Performance based grouper outcome RCM Solution Charge Coding Calculation Engine Contractual Discounts Payment Posting Performance Measures Distributions

What Rates will ACO Charge? Answer Will vary by Payer Likely % Medicare Performance-based Individual Provider Whatever we can RCM Solution CDM & Fee Schedules By Provider, By Contract Grouper and EBM performance calculator Medicare Values for all ACO Providers

How Will ACO Monitor Performance? Answer Across Care Continuum Primary Care Specialty Care/OP Acute Care/IP Sub-Acute Home Care/Follow up RCM Solution Capture Claim Activity Report Care Variance from Benchmarks Facilitate interfaces to Providers in ACO

How Will the ACO Handle Claims? Answer Receive Claims from Providers and Facilities Send Claims or Claim Summaries to Payers Receive Payments from Payers RCM Solution Bundled Claims Scrubbing Bundled Claims Clearing Calculation Engine Performance-based Payment Posting Variances

How Will The ACO Prepare Reports? Answer From the Claims Data From Payer Data From Clinical Data RCM Solution Standard Reports from ACO RCM Database Payer Report Validation External Data Imports Ad Hoc Reporting

Who Will Manage the ACO? Answer RCM Solution We will for the Transactions side The Medical Staff will run the care delivery management RCM Solution Implement a Platform that will manage these transactions

So Then, How to Start – Part 1 Be Sure that the Revenue Cycle Team is an Integral Part of the Health System discussions about Integrated Care In a nice way, remind leadership that this Reform is Revenue Cycle Management reform Take an Inventory of your Hospital Patient Accounting, Contract Management, and RCM reporting capabilities Identify the likely Providers (Physicians and other facilities) that will be a part of your Integrated Network Talk with your big Payers about their Interests Monitor CMS ACO Progress

How to Start – Part 2 Identify missing parts in existing RCM IT infrastructure These will likely be in complex contract management, cost reporting, CDM and Fee Structure Management, etc. Research opportunities with existing RCM IT vendors Do they have platforms to integrate the new RCM functionalities for providers across the care continuum? What are their plans? Explore the Market for New or Added Solutions Look for platforms that accommodate the entire continuum Remember the new requirements – enrollment, bundled modeling, bundled claim adjudication, treasury, etc.

How to Start – Part 3 Present your researched RCM Functionality Plan to the Health System Integrated Care Leadership Group Incorporate the Clinical Benchmarks, EBM Standards, and Services (CMS ACO, Cardiovascular, Ortho, etc.) under consideration by the Clinical Leadership Determine what Services and Payment Models are being considered by your major Payers Using your new processes, Model the potential arrangements that are being discussed by the ICLG Bring the Information back to the Leaders for Discussion Sign a Contract & Manage the Transactions

Summary The Shift from FFS will likely be gradual and incremental There is sufficient time to design your plans But, it will take time culturally and operationally. Clinical Change Management will require consensus building and professional compromise Revenue Cycle Change Management will require operational retooling, distributed accountability, and technical upgrades to maintain a shared RCM Platform The Market Winners will be Ready for the Change

Thank you !! Nick Hilger nhilger@jdaehealth.com 651-324-2943